The Vineyard Hotel has 70 rooms, a beautiful restaurant and a conference room with a maximum capacity of 30 guests. The high season for this hotel is during the summer, mostly driven by leisure transient travelers who are coming to Niagara. One of the busiest weekends in the year is the Canada Day long weekend and historically the hotel has had high occupancies during this weekend. The demand in the entire region is high during this weekend. The revenue manager has therefore forecasted to have an average ADR of $195 all driven by transient travelers. Normally the hotel has not taken any groups over this weekend, however this year the hotel received a group request from a Travel company called Travel Fun. The Vineyard Hotel has received other groups from Travel Fun and this company has given the hotel bookings during low season as well.

They are looking to book 21 rooms a night for 3 nights with a group rooms price of $125 per night per room. They are also looking for a breakfast $15 per person (3 mornings). They need a meeting room for 2 days at $350 a day.

HOTEL FACTS:

Transient Hotel Price & Cost for Food
Meal	Price	Food Cost %	Food cost $	Net Revenue/ Margin	Transient capture %
Breakfast	$18	30%	$5.40	$12.60	50%

• Total amount of group guest rooms: 63 (3*21)
• Total amount of group breakfast: 63 (3*21 - For this example we assume rooms are single occupancy)
• Meeting Room (Other Revenue): $350 a day need 2 days: $700 total

Question 1: Calculate the displaced rooms a day (2 points)

Hotel inventory	70
	Friday	Saturday	Sunday
	30-Jun	1-Jul	2-Jul
Hotel Forecasted Rooms Sold	65	70	65
Forecasted rooms available
Group Rooms requested	21	21	21
Displaced Rooms

Total Rooms displaced: ______________

Question 2: Calculate Total Room cost for group and transient (2 points)

Cost Guest Room
Segment	Room ADR/Price	Variable Cost	Franchise Fee	Marketing Fee	Total Cost
Transient	$ 195.00	$ 15.00	3%	2%	$
Group	$ 125.00	$ 15.00	3%	2%	$

Question 3: Establish the Net Room Revenue Differential (2 points)

Total Group Room nights
Group Room Rate	$
Total Group Room Revenue	$
Total Group Room Cost	$
Total NET group room Revenue	$
Total Displaced Transient Room nights
Displaced Room Rate	$
Displaced Room Revenue	$
Total Transient Room Cost	$
Total Displaced Rooms Revenue	$
Net Room Revenue Differential	$

Question 4 Establish Net Food Revenue Differential (2 points)

Group Breakfast
Group Breakfast	63
Breakfast Group price	$15.00
Breakfast Cost	$5.40
Margin Group Breakfast	$9.60
Group Breakfast contribution	$

Transient Breakfast
Displacement Transient Room nights	53
Breakfast price	$ 18.00
Breakfast Cost	$ 5.40
Margin Transient Breakfast	$ 12.60
Transient Capture Rate	50%
Transient Breakfast contribution	$

What is the Net Food Revenue differential? $ _______________

Question 5 a. Calculate the total increase or decrease when accepting this group (2 point)

Net Room Revenue Differential	$
Net Food contribution differential	$
Other Revenue contribution	$
Total Increase/Decrease from Group	$

b. According to the answers of Question 5 a., would you recommend the hotel to take this group during the long weekend YES or NO and explain in your own words why? (5 points)